Analyst Ross MacMillan wrote that there is an “an increasing number of data points to suggest that Oracle’s engineered appliance strategy is not proceeding as well as planned,” reports Barron's.

Oracle gambled $7.4 billion on Sun Microsystems in 2009 so it could build these integrated products.

MacMillan seems particularly underwhelmed with the three of Oracle's stars.

Exadatais an all-in-one appliance that combines servers, storage, networking and Oracle database software. MacMillan believes that sales for it are getting tougher now that "Oracle has moved beyond the low hanging fruit of the largest customers with the highest appetite for these systems (in verticals such as financial services, public sector and telco)."

Exalogic is a similar appliance for Java apps and Oracle's enterprise software (like its CRM or E-Business Suite). But do companies want it? That's unclear. MacMillan says, "Exalogic still appears to be looking for an obvious broad use case."

The Oracle Database Appliance (ODA), which runs the Oracle database, is apparently in high demand. But MacMillan says Oracle released a buggy product with "technical challenges" that it's now working to fix. MacMillan is still "optimistic about the success of ODA, but the early optimism appears to have waned," he says.

As for Exalytics, the newly released competitor to SAP's HANA, the jury's still out on that, he says, as it hasn't been available long enough to judge.

He did, however, calculate just how much HANA could hurt Oracle. SAP would like nothing more than if all of its Business Warehouse customers replaced Oracle with HANA. If half of them did, MacMillan says this would peel $350 million to $700 million from Oracle's coffers, representing "a 2 - 4.5% negative impact to [Oracle] software updates and support revenues" ... an approximately $0.05 - $0.10 impact to EPS.

On top of all of that, Oracle is under attack from other sectors. Cloud software like Salesforce.com is a challenge to traditional CRM software. And "big data" noSQL database alternatives are poking holes in Oracle's traditional database market. Although Oracle offers noSQL and Hadoop, competition for these new markets is fierce. For instance, in January, Amazon launched a noSQL cloud service and startup Cloudera is killing it in the Hadoop market.

MacMillan cut his rating on shares of Oracle this morning to Hold from Buy and cut his target price from $35 to $32.